Know Before You Buy!
Who owns the golf course a home sits on should be carefully investigated prior to the purchase of a home. There is a risk that a golf course not owned outright by the HOA could go bankrupt, be sold, redeveloped or force residents to pay for a membership.
Back in 2015 the Coachella Valley famously had 2 golf courses close. The Santa Rosa Golf Club and the Rancho Mirage Golf Course closed in 2015 raising uproar from homeowners and member of these 2 courses. In the case of the Rancho Mirage Golf Course homeowners opened a lawsuit against the Golf Course owners, Oasis Ranch LLC, the lawsuit was dismissed when a deal was reached with homeowners in November of 2017. The settlement agreement allows Oasis Ranch LLC to place a boutique hotel on the site while deeding about 80 acres to the HOA. During the months prior to this settlement median home prices dropped by a whopping $152,000 and was a harsh warning for homeowners in the Valley to pay attention to golf course ownership.
Now in 2017, it seems that golf courses in the Coachella Valley are making more money and the risk of bankruptcies has been mitigated for now, however this does not necessary mean your golf course is safe. Across the country real estate developers have been seeing the value golf course land out performing the profits from green fees and memberships. So even relatively profitable courses could have their golf course sold out from under the HOA. While this has not happened in the Coachella Valley there are examples of golf courses like Stoneridge Country Club in Poway, California where the future is uncertain for this former LPGA Tour host course.
Golf Course Closures
With over 211 golf courses closing in 2016 and a projected “150 to 175” closures nationally in 2017, it is certain that the new reality may be to expect at least one closure here in the Coachella Valley in the coming decade. So when searching for a home, do your research and know the risk! (Source: Golf Advisor)
How Do I Find Out if my Golf Course is Safe?
While most golf courses in the Coachella Valley are still in good standing, the first step is to find out who owns it and the financial standing of that owner. If your golf course is run and owned by your HOA you should be in the clear. If not ask your HOA and find out which company owns the golf course and ask if there is an agreement for how the golf course can be run or re-developed. The next step, if you are not satisfied with the ownership, is to reach out to your neighbors and work together with your HOA. This strategy has worked out for homeowners in Rancho Mirage Country Club and has most likely managed to save at least part of their Golf Course. These deals are going to become more and more common as golf demand wanes and developers continue to see the value of redevelopment or partial redevelopment of existing courses.
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